I am still really confused on last week...March 26th when unemployment #s were released the market surged like crazy and SPX went from 2500-2626...WTF? A monumental number of people are out of work ALREADY and this shit show is just now getting kicked off...It seems crazy to me to interpret that as anything other than bad. Would you agree that the market had an inverse reaction to that news? Should that reaction tell me something that i dont have experience enough to see?
What is Your Take on the Announcement Effect with Unemployment #s?
- Thread starter zghorner
- Start date
My thoughts would be a lot of people are bearish and a lot of people are short. Trading generally speaking isn't just as easy as pressing a button and than printing money. If a lot of people are short others will take the opposite side of that to force some out even if only temporary.
In other words it has a lot to do with supply and imbalances in supply. If there's not currently a lot of sellers, but there are a lot of shorts it only takes relative minimal buying to get things moving up as if there's no supply for shorts to cover, it's going to lead to higher prices. At least temporarily.
In other words it has a lot to do with supply and imbalances in supply. If there's not currently a lot of sellers, but there are a lot of shorts it only takes relative minimal buying to get things moving up as if there's no supply for shorts to cover, it's going to lead to higher prices. At least temporarily.
That makes sense thanks. I guess the next step worse would be when shorts start to cover because they stop out etc...driving the price up further.
Really no different when on any given EIA report for Crude supplies, when we have an extreme reading one way or the other, the CL contracts swing in the counter-intuitive direction. I.E. Shock number on a huge increase in supply? CL would spike up, only to settle back the other way later. (I mean during normal times, like before virii and OPEC price wars.)
This may have been something similar. Everyone knew the unemployment numbers would be bad and maybe some of it was priced in. Markets were already on a 2-day tear upward, so there was momo. Friday of course took a lot of that back. As for today? Stimulus bill signing mood?
Heh, looking at the calendar, they have a forecast for ADP on Friday, but nothing yet for Thursday initial that I can see. Are they even afraid to post that forecast?
Right now everyone and their moms think the market can only go down. When mostly the mass thinks like this. I do the opposite which is I buy. My contrarian strategy kicks in.
I was looking at the euro dow sentiment being 70 % short. I though about doing the opposite today.
Son, after about 10 years of this sh*t, you too will see what is "obvious".
Buy the rumor, sell the fact for good news, inverse for bad news.
Obviously, the facts you point out are well-known and priced in. In order to get new lows you'll have to see significantly worse than expected economic news - a tall order for at least the next month or two, given how apocalyptic the projections are. If things more or less follow those projections, or indeed do better than forecast, then the market will start to work its way higher in the coming days and weeks (maybe after another flush of weak-handed early buyers). If we get into summer and it becomes clear that no V-recovery is in the offing, that's when you can see a decisive break to new lows.
I think it is clear NOW that we won't have a V recovery. Best we can hope for is the U-ish shape.
so you must have been shorting all last fall then, right?